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Top Glove to strengthen pole position(Business Times (Malaysia) Via Thomson Dialog NewsEdge)TOP Glove Corp Bhd, the world's biggest rubber glove producer, aims to cement its pole position further by taking a quarter of the market by the end of 2007 from 16 per cent currently. Executive chairman and managing director Datuk Dr Lim Wee Chai said the company also plans to buy rival factories locally and abroad within the next couple of years and double its dividend payout to 30 per cent by 2007. "We are now talking with a few parties and we are looking at all aspects such as return on investments, location, raw materials and labour cost," Lim told reporters in Kuala Lumpur yesterday after the company's annual general meeting. By the end of 2007, Top Glove aims to increase factories to 16 from 12 now, boost production to 29 billion pieces of gloves a year from 18 billion pieces currently and add production lines to 350 from the current 200. "We also aim to have a total of 850 customers from 700 now, export to 180 countries from 170 and employ 12,000 workers from 7,500," said Lim. The company, which sells 30 per cent of its products each to the US and Europe, is eyeing new markets such as Latin America, Africa, eastern Europe and Asia. The target is achievable, Lim said, because the world, which consumes 112 billion disposable gloves a year, is growing at a rate of 12 per cent, or 13.4 billion pieces, a year. "Top Glove, meanwhile, is growing at a compounded annual growth rate of sales revenue of 44 per cent and 40 per cent for net profit." Big US multinationals are also not expanding but instead resorting to outsourcing from efficient glove manufacturers around the world. "Back home, the growth drivers for Top Glove is the consolidation in the industry from 200 factories in the 1980s to 50 currently. "Furthermore, the emergence of new viruses such as the Severe Acute Respiratory Syndrome, avian flu and bioterrorism threat such as anthrax and robust will also ensure demand," said Lim. On its four new plants, Lim said two will be in Klang and one each in China and Thailand, each costing RM25 million. The Klang-based company now has nine local factories, two in China and one in Thailand producing 13 types of gloves such as nitrile, powder-free, surgical and household. Lim said the company has no plans to raise funds from bond sales because it still has RM125 million raised from a bond sale last year. Also, it strives to maintain a gearing level, a common measure of debt level, at 0.6 times. Malaysia is the world's largest producer of rubber gloves of all types accounting half of world production churned out by a combined 50 factories, of which half go to the US. The world consumes 112 billion pieces of gloves a year from powdered to powder-free and nitrile used in the medical, food industries and household usage. |